August 21, 2011 | Read Time: 5 minutes
How bad do things have to get before American foundations remove their security blankets and embark on a bold and decisive course of action to help solve the nation’s problems?
That’s a question I’ve been asking myself a lot over the last few weeks, between scanning the news from Washington and checking the red ink as it spreads across my pension plan. (Yes, since I’ve worked for foundations, I’m lucky enough to have one.)
With the economy in free fall, politics gridlocked, and the public deeply divided over what to do next, one might expect that foundations would be straining every sinew to come up with responses that match the severity of the problems America faces.
But most continue to get by with giving the very smallest amount required by law and financing their own pet projects that have little influence over the forces that drive or block real change.
For all their talk about results, they create projects that are supposed to spread innovations across the country but never do, campaigns that have no sticking power, and a growing distance between foundations and the public. This is not the kind of leadership we need.
Instead, what America needs are philanthropy leaders willing to commit all foundations to doubling their giving over the next five years, injecting an extra $200-billion into the nonprofit economy. This is not a time for technical debates about payout rates and metrics, or rates of return, theories of change, or any of the other fashions of the moment. It’s a time to get as much money as possible to as many groups working on the ground as we can, with no strings attached.
Every community has nonprofits that know which people are hurting most and plenty of organizations that are deeply involved in doing work that is carefully tailored to the real challenges caused by the downturn.
Those groups will put extra foundation money to good use in organizing citizens to fight for real and lasting solutions and strengthen the infrastructure of caring, cooperation, bridge-building, and accountability that underpins any sustainable progress.
A key lesson of history is that it is society’s capacity for innovation that matters most, not any particular innovation at any particular time, and these capacities have to be distributed as broadly as possible throughout the population. With grant makers’ fetish for the “next new thing,” this is a lesson that they still must learn.
For foundations, the decision to give more is easy compared to the challenges facing government when deciding which programs to cut or which taxes to raise. It would require some fancy footwork further down the line for foundations whose donors want their assets to last forever. In the grand scheme of things, though, such adjustments would be minor, and who really cares if the Ford Foundation isn’t around to celebrate its one thousandth anniversary in 2936, by which time we’ll all have moved to Mars?
Putting more foundation money into the economy now would help to reduce the pain that so many Americans are feeling, while building the capacities and connections the nation needs to face the future with some confidence. Such a bold step would show the public that foundations are on their side at a time when philanthropy’s role in society is increasingly divisive.
However, it will take more than money to solve the deeper, structural problems that lie at the heart of the American dilemma, especially the growing mismatch between what we want from the “good society” and what our current economic and political systems can deliver.
And it’s not just the challenges of today that are so scary. We are completely unprepared for a world of even greater scarcity and inequality, climate change, and the economic and social turmoil that could result from these growing problems.
Too much giving by America’s foundations focuses on extending participation in the systems we have already, not realizing that these systems are themselves unsustainable or otherwise incapable of resolving deep-rooted differences and problems. Transformation is what we really need, and who better to support it than foundations, the one institution in society that can take the longest view and the biggest risks, freed from the electoral and financial cycles?
So more than anything else, what foundation leaders must do now is use this crisis to help the American public imagine and create a new economy that delivers jobs and helps people flourish, that guarantees security for everyone within the ecological limits of a finite planet, and that turns away from debt and rising consumption as cure-alls for our ills.
No one knows what a genuinely just and sustainable economy would look like or how it would feel to live in one since major changes would be required in our way of life, but there’s nothing to stop us from thinking through the options and the implications and supporting experiments that put these new ideas into practice.
Clean energy, “green” growth, and new technology won’t be enough to get us where we need to go, because they rely on a continually expanding economy even if it is more efficient.
So we need to help individuals and communities become more self-reliant and share work and resources with each other and offer incentives to organizations that meet their responsibilities to the common good. At the same time, we must find ways to persuade companies to produce goods that last longer and can be repaired more easily and rein in our reckless financial system to encourage more stable investment where it matters most.
Those are not ideas for the faint-hearted, and they take us into largely uncharted territory, which by definition can’t be mapped and therefore can’t be subjected to predetermined plans and evaluation efforts.
“Rates of return” for these kinds of investments may not be visible for a generation or more, and this journey will challenge American foundations to the core of their identity by requiring a radical restructuring of the economy, the wealth it produces, and the position of foundations in society.
To support transformation on this scale, philanthropy must also be transformed, and that is surely the ultimate test of leadership.
